Should the NBER Confirm the United States is in a Recession?
Think Piece/Open Discussion
Recently evaluated economic data shows that for a second consecutive quarter really GDP has declined. This is a generally rough definition/equivalent of a Recession but the question at hand is: Should the NBER come out and just declare that the United States is officially in a recession?
How would such an announcement affect Joe Biden’s presidency and will his current 36% job approval just be completely unsavable?
One issue that has recently blossomed is the government trying to twist the definition of a recession. How can anyone even entertain the twisting of the definition? Let’s be honest for a second, I DO NOT think the recession is Biden’s fault, however, if Trump were in office at this very moment there would be zero wiggle room and a recession would have been declared a little bit ago (yes, as a Democrat even I can see this).
Continuing to the initial topic/question, if the NEBR declares an official recession there is 100% not enough time to recover before the midterms in November and there is also another 100% certainty that it will affect the Democrats’ chances of keeping control of Congress. The economy is constantly tied to being one of the biggest pain points for any voter come election time and if a recession is declared, then the Biden administration’s attempts to downplay the economic uncertainty will just come off as desperate misdirection.
If we look further down the road, 2024 specifically, it’s possible things could improve somewhat by then, but still by no means is that even guaranteed. Persistent inflation that is just reignited by global supply chain disruptions and the war in Ukraine is showing no signs of slowing down and if the economy continues its contraction, then it’s possible stocks will fall even further than they have already. We can see this reflected in the real economy through layoffs and hiring freezes which in reality have already begun.
I will note however that this is all speculation due to the NBER not having issued any such notice yet. I don’t think they will in the near future either because in spite of the contracting GDP, consumer spending is still high and unemployment is at near-historical lows. Neither of which are signs of a bad economy. At the end of the day though, we are in a recession and regardless of what the NBER says, we will all believe so anyway.